A call for Gov’t in Transport System

We have a paradox in our public transportation system where we are over bused and still have an inefficient public transport service and system. There are over 1200 registered buses plying the roads of St Lucia to service a commuter population of our size. Clearly, while we are generally over bused there are a number of communities that are under served. In such cases there is need for targeted government intervention to ensure a satisfactory bus service so that the opportunities and need for mobility of residents in affected communities are not diminished because of an inadequate system.

Given the vital and strategic importance of a public transport system to the social and economic development of a country, the transport sector must be structured and regulated to ensure that it serves and is compatible with the needs of the country at its current stage of development. Given the economic circumstances of commuters and population distribution, some routes are more viable than others and likewise some commuters are more able to afford bus fares.

Not everyone can solve their need to move around the country to get to work, school and for recreational purposes by purchasing a vehicle.

More importantly, an efficient and affordable public transportation system, which allows for the maximum movement of people is necessary for optimal socio-economic development. For these and other reasons there is need for government’s strategic presence in the sector to prevent the occurrence of adverse socio-economic effects of a one-tier quasi-monopoly private sector only, provided bus service. Indeed this is the case in many countries around the world including in our region such as in Barbados with the Barbados Transport Board, Trinidad with the Public Transport Service Corporation and Jamaica, with the Jamaica Urban Transit Company (JUTC).

St Lucia can do likewise with a similar upgrade to its transportation system to augment what is currently provided by the NCOPT and its minivans. To do so Government needs to establish a statutory body or a private-public partnership company to provide an additional tier of buses that are centrally managed and operated by this body.

Governments throughout the world widely subsidize transportation, in its various forms. The question is which parts of the transportation sector would benefit from a subsidy? For how long and under what conditions? It is essentially a matter of public policy choice. In some cases the subsidy can be given to the supplier to reduce the cost of providing the service or to the commuter to defray cost of transportation. What has been practiced by successive governments driven mainly by political considerations is to grant concessions and pay rebates to the National Council of Public Transportation (NCOPT) as a whole. The amounts granted (a grand total of about $7 million over the past five years) is divided among members simply because of their membership in the NCOPT and not based on a needs assessment for each bus or route. Subsidies provided in this way are blunt and inherently inefficient as they are not targeted. They promote a situation where bus operators simply free ride on the system. In other words, there is the free-rider problem where buses that may not need to be subsidized are being subsidized while those which may need to be subsidized are not. Hence government is inadvertently perpetuating inefficient operations and distorting the marketing signals without any commensurate benefit to the public and country.

The rebates help inefficient buses to remain in operation. The transportation sector does not respond to market signals because there is no free entry and exit. The government has been handing out subsidization card blanche. This is unsustainable. While bus operators get this windfall the public and government get nothing. Hence ABETTA Country is recommending that subsidization in the transport sector should be looked at on a case by case basis. They may be given to the supplier in areas with low population density where the government would like to encourage settlement, or they may be given to the commuter based on needs assessment or other qualifying criteria as previously stated, to the elderly, low income families, school children, etc.

Ushering in Structural Change

The regulatory framework of the sector needs serious review. For example, holders of route bands treat these permits as their personal property for life. Holders of route bands which are, by the way really the property of the Government of Saint Lucia are leased, rented and sold for thousands of dollars, not a penny of which is paid into the coffers of the government. All the while these route bands are being freely transferred by holders.

Structural change is needed if the country is to realize any meaningful change in the transportation sector that accords or serves our economic and social interests. The changes must be through legislative and regulatory reform. At the very least, coming out of the process there must be the introduction of two separate and distinct tiers or categories of buses/suppliers. In our circumstances this can mean the existing mini buses as one tier and the introduction of a new parallel tier of larger buses ranging between 25 to 30 seats.

However, there must be a regulatory wedge between these two classes of buses to prevent any anti-competitive behaviour such as collusion across sectors. Importantly, concessions granted to the sector must be conditioned on compliance with this requirement (which is no collusion) as well as other desirable conduct or behaviours in that sector.

Our current monopoly-type arrangements under the NCOPT are such that any external shock (such as increases in fuel prices) or even some internal problems can be passed onto government and by extension the tax payers, because of their market power and ability to effect a strike or reduction of service. This is totally unacceptable at this stage in our development.

Standardization

It is important to note that in creating a new tier or category of buses a key requirement for such a system to work is that the new tier of buses should be centrally managed and controlled, to ensure standardization of these buses. If not, we will only succeed creating chaos with a number of buses albeit (25-30 seaters) that vary in size, make, colour and other features, sourced from countries and makers plying our streets. Instead the aim should be to have a fleet of larger buses in a new tier which is as homogenous as possible in type, size, colour and appearance as is the case in most centrally managed systems.

Therefore the process of ushering structural change into our public transportation sector would mean that we need to have a definition of what constitutes a public transport, in terms of its features.

ABETTA Country believes that the needs of St Lucia will be better served by a mix of scheduled and unscheduled buses. The overall effect of a two-tier system in the public transportation system is an economy that will be more resilient with increased choice and less possibility of disruption in supply. The time has come to move our public transportation system to the 21st century and to the next level beyond the present loose and ad hoc system. So let us all muster the courage to make the investments and the necessary changes.